Nigeria Slashes Oil Signature Bonus to $10 Million as Government Targets 2.5 Million Barrels Daily Output by 2027

Nigeria has reduced the cost of signature bonuses for oil block licenses from about $100 million to $10 million as part of efforts to boost oil production to 2.5 million barrels per day (bpd) by 2027.

Signature bonuses are non-refundable, upfront payments made by companies to the government for the rights to explore and develop oil blocks.

Gbenga Komolafe, Chief Executive of the Nigerian Upstream Regulatory Commission (NUPRC), announced the development on Thursday at the 2025 Nigeria Association of Energy Correspondents (NAEC) Conference in Lagos.

He explained that President Bola Tinubu approved the downward review during the 2024 mini-bid round to enable investors to direct more resources toward field development.

“This single decision has strengthened investor confidence, encouraged early production and reinforced Nigeria’s reputation as an open and competitive upstream jurisdiction,” Komolafe said.

He added that the Commission had also prioritised production optimisation and recovery enhancement by reviewing field development plans, supporting brownfield optimisation, and enabling the re-entry of shut-in wells. These interventions, according to him, are expected to deliver incremental production volumes exceeding one million barrels per day — a key milestone toward achieving the national target of 2.5 million barrels per day by 2027.

Komolafe emphasised that sustaining this rebound requires secure infrastructure and credible measurement systems. He said the NUPRC had partnered with security agencies, private contractors, and community stakeholders to implement the Upstream Measurement Regulation and Advance Cargo Declaration Regulation. These efforts, he noted, have led to a 90% reduction in crude oil theft from over 102,000 barrels per day in 2021 to just 9,600 barrels per day as of September 2025.

“By implementing the PIA’s Host Communities Development Trust (HCDT) provisions, the Commission has successfully inaugurated over 90 Trusts across the Niger Delta, ensuring that development funds flow directly to communities,” he added. “This model not only secures local ownership but also guarantees peace, stability and continuity in production, key pillars for sustained energy security.”

Komolafe noted that Nigeria’s ongoing rebound in oil output was the result of deliberate regulatory reforms anchored on transparency, efficiency, and inclusiveness.

He also highlighted progress in advancing Nigeria’s gas agenda under the “Decade of Gas” initiative, which supports the country’s energy transition strategy.

“Natural gas remains our most reliable transition fuel, a catalyst for industrialisation, power generation, and clean energy substitution,” he said. “By promoting gas monetisation, flare elimination, and gas-based investments, the Commission is reinforcing Nigeria’s commitment to a just and balanced energy transition.”

Citing projections by the International Energy Agency (IEA), Komolafe noted that global upstream investment is expected to exceed $580 billion in 2025, underscoring the continued relevance of hydrocarbons for industrial growth, especially in emerging economies like Nigeria.

“As we look to the future, our priorities remain clear: to sustain Nigeria’s upstream rebound, achieve 2.5 million barrels of oil per day by 2027, strengthen gas monetisation, protect our energy infrastructure, and uphold the principles of transparency, accountability, and efficiency that define our regulatory mandate,” Komolafe said.